- News
- Business News
- India Business News
- Mukesh to spend Rs 15k cr for RIL stake
Trending
This story is from February 24, 2007
Mukesh to spend Rs 15k cr for RIL stake
Mukesh Ambani is looking at increasing his stake in Reliance Industries Ltd (RIL) to 55% through an issue of preferential warrants.
MUMBAI: Mukesh Ambani is looking at increasing his stake in Reliance Industries Ltd (RIL) to 55% through an issue of preferential warrants.
Mukesh will invest about Rs 15,000 crore to increase his stake by about 5%. RIL's board is meeting on Saturday to discuss this issue, along with some other matters, sources said.
As per the plan, each warrant issued to Mukesh could be converted into one share of RIL 18 months from the date of issue.
Compared to RIL's 52-week high price of Rs 1,444, the warrants will be issued at a price of Rs 1450. The issue price is also nearly 3% higher than RIL's Friday closing price of Rs 1,412.80. In Friday's weak market, RIL stock ended
Under the preferrential allotment plan for Mukesh, 10% of the Rs 15,000 crore will be paid now and the balance amount will be paid after 18 months, when the warrants are converted into shares.
In a February 15 note to the BSE, RIL said its board will meet on February 24 to review some earlier decisions. One of them being, "to discuss raising of further resources to finance on-going capital expenditure across several new projects through syndicate loans, non-convertible debentures, convertible debentures, external commercial borrowings, foreign currency convertible bonds, preference shares, warrants or other instruments."
Existing rules for preferential allotment, allows promoters of Indian companies to consolidate their shareholding upto 55% against any global hostile takeover. In RIL's case, there could be two reasons.
One, the senior of the Ambani siblings could use his stock just like Lakshmi Mittal of Arcelor Mittal did to buy larger assets overseas. Two, he could enjoy a controlling stake in case he decides to give a minority stake in RIL to global refining companies like Chevron for long term supply of crude to feed RIL's refineriers at Jamnagar.
Mittal had used part of his personal holdings in Mittal International to pay Arcelor shareholders in his $38 billion deal with the European steel maker.
However, Mukesh is not the first one to take the preferrential allotment route to hike stakes in a group company. KM Birla had used the route to hike the groups stake in Hindalco; then there was Tata Sons which did the same in Tata Steel; and Sajjan Jindal did in with JSW. Anil Ambani had issued preferetial shares to hike stake in ADAG companies.
Mukesh will invest about Rs 15,000 crore to increase his stake by about 5%. RIL's board is meeting on Saturday to discuss this issue, along with some other matters, sources said.
As per the plan, each warrant issued to Mukesh could be converted into one share of RIL 18 months from the date of issue.
Compared to RIL's 52-week high price of Rs 1,444, the warrants will be issued at a price of Rs 1450. The issue price is also nearly 3% higher than RIL's Friday closing price of Rs 1,412.80. In Friday's weak market, RIL stock ended
just Re 1 lower than its Thursday close.
Under the preferrential allotment plan for Mukesh, 10% of the Rs 15,000 crore will be paid now and the balance amount will be paid after 18 months, when the warrants are converted into shares.
In a February 15 note to the BSE, RIL said its board will meet on February 24 to review some earlier decisions. One of them being, "to discuss raising of further resources to finance on-going capital expenditure across several new projects through syndicate loans, non-convertible debentures, convertible debentures, external commercial borrowings, foreign currency convertible bonds, preference shares, warrants or other instruments."
Existing rules for preferential allotment, allows promoters of Indian companies to consolidate their shareholding upto 55% against any global hostile takeover. In RIL's case, there could be two reasons.
One, the senior of the Ambani siblings could use his stock just like Lakshmi Mittal of Arcelor Mittal did to buy larger assets overseas. Two, he could enjoy a controlling stake in case he decides to give a minority stake in RIL to global refining companies like Chevron for long term supply of crude to feed RIL's refineriers at Jamnagar.
Mittal had used part of his personal holdings in Mittal International to pay Arcelor shareholders in his $38 billion deal with the European steel maker.
However, Mukesh is not the first one to take the preferrential allotment route to hike stakes in a group company. KM Birla had used the route to hike the groups stake in Hindalco; then there was Tata Sons which did the same in Tata Steel; and Sajjan Jindal did in with JSW. Anil Ambani had issued preferetial shares to hike stake in ADAG companies.
End of Article
FOLLOW US ON SOCIAL MEDIA
Hot Picks
TOP TRENDING
Trending Stories
In Business
Entire Website
- Will banks open only for 5 days a week? Here’s what you should know about IBA’s proposal
- India set to be third largest economy, says S&P Global
- Dalal Street bull run continues! BSE Sensex crosses 69,000 for the first time; Nifty above 20,800
- Byju’s reduces notice period for employees as troubles mount
- Sensex surges over 900 points, Nifty above 20,550 as BJP state election wins bolster Modi's Lok Sabha 2024 prospects
- UltraTech to buy building materials business of Kesoram in 7,600 crore deal
- Tata Technologies stock debuts at a bumper 140% premium; share price at Rs 1200 on BSE
- Tata Technologies share allotment: How to check IPO allotment status, listing date, GMP
- BSE m-cap rides rally in Adani stocks, tops $4 trillion
- Charlie Munger, who helped Warren Buffett build Berkshire, dies at 99
- Putin invites 'great friend' PM Modi for talks on sidelines of BRICS summit
- 75% of India's 'disengagement problems' in eastern Ladakh resolved: Jaishankar
- While Kamala focused on substance, Trump's lies had the final word
- 'Deal with it': Oppn vs BJP over PM Modi attending Ganpati Puja at CJI's house
- Patient, 11, raped in Agra medical college, doctor held
- In the (y)ear of conspiracy theories, Trump hears insults galore
- Pictures, videos: Why there is no other beach like this in India
- Planning to buy iPhone 16? How much Apple will give for iPhone 12 & others
- Adani Group rejects Hindenburg claim of $310 mn asset freeze in Swiss banks
- On Mamata's 'ready to resign' offer, protesting docs say 'want justice'
Popular Categories
Hot on the Web
Top Trends
Trending Topics
Alia BhattMalaika Arora Father DeathArbaaz KhanNatasa StankovicMr Bachchan OTT ReleaseNational Parks In IndiaSelena GomezGOAT CollectionVikas Sethi DeathMalayalam ProducersIndia's Best Dancer 4Simi GarewalDilli BabuIndian National ParksLaung BenefitsVikas SethiiPhone 16Microsoft 365 OutageCsir Ugc Net 2024Wordle Answer
Living and entertainment
Latest News
India successfully flight tests surface-to-air missileFintech Moneyview turns unicorn, 6th one this yearDigest this: Unhealthy gut may be linked to Parkinson’s diseaseCSIR UGC NET 2024 result declared: Steps to download scorecards at csirnet.nta.ac.inAadhaar card update: Do you have to compulsorily update details on your Aadhaar every 10 years?Single Indians are now choosing slow, meaningful dates over-elaborate outings, reveals an online dating platform’s surveyWho was Illia 'Golem' Yefimchyk, the Belarusian bodybuilder who consumed 2.5 kg of meat and 108 sushi pieces daily before his death at 36?Vijay Varma reveals he was DROPPED from 'Sacred Games' at the last minuteWWE Star Discusses Why Sid Vicious Deserves a Hall of Fame SpotCatching up with sports stars in DelhiSalman Khan surrounded by bodyguards as he arrives at Malaika Arora's mother's house to offer his condolences - WATCHCMF Buds Pro 2 by Nothing review: Big delivery on a budgetMallika Sherawat makes big screen comeback in Rajkummar Rao's 'Vicky Vidya Ka Woh Wala Video'; director reveals why he cast herArbaaz Khan spotted outside Malaika Arora's house along with police after the tragic news of her father's demise by alleged suicide - WATCH VIDEOHarvey Weinstein charged with additional crimes during hearing on rape chargesMitchell Schwartz's Cryptic Tweet Stirs Debate About Mahomes' ContractSiddhant Chaturvedi reveals he rejected Ranbir Kapoor, Alia Bhatt and Amitabh Bachchan starrer Brahmastra after father’s advice: 'He asked me, ‘Tujhe kaun dekhega?''EcoR unloads 100 million tons of goods in just 160 days
Copyright © 2024 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service